Selling Investment Property And The Availability of the Proceeds From Settlement or Closing
Q: My husband is selling an investment property and the buyers have asked to push out the closing a second time for financing purposes. My husband’s real estate agent now says that the closing attorney (representing the finance company) wants to close on the sale of the investment property, but the transfer of money will not be made available until a day or so after the closing.
It seems bizarre to legally relinquish property rights without receiving a check in hand. Are there scenarios where this makes sense?
A: Sometimes you have what is known in the industry as a “dry” closing, or at least that is a term used in some parts of the country. This happens when the documents are signed at the closing or settlement of the sale of the investment property, but the funds aren’t transferred until later.
You will want to talk to a local real estate attorney who can ensure that you and your husband are protected in this transaction. Whenever you give up possession of an investment property without getting your cash — your proceeds from the settlement or closing, you want to be careful. You generally want to have the cash in hand before the buyer gets the title to the investment property, keys and possession to the building.
Please find an attorney immediately to assist you.
Learn more about selling investment property and using a 1031 exchange when selling investment property